We report on strong X-ray variability and the Fe K band spectrum of the Seyfert galaxy IRAS 18325-5926 obtained from the 2001 XMM-Newton EPIC pn observation of a 120 ks duration. While the X-ray source is highly variable, the 8-10 keV band shows larger variability than that of the lower energies. Amplified 8-10 keV flux variations are associated with two prominent flares of the X-ray source during the observation. The Fe K emission is peaked at 6.6 keV with moderate broadening. It is likely to originate from a highly ionized disc with the ionization parameter of log xi ~3. The Fe K line flux responds to the major flare, supporting its disc origin. There is a short burst of the Fe line flux with no relation to the continuum brightness for which we have no clear explanation. We also find transient, blueshifted Fe K absorption features, which can be identified with high-velocity (~0.2 c) outflows of highly ionized gas, as found in other active galaxies. The deepest absorption feature appears only briefly (~1 hr) at the onset of the major flare and disappears when the flare is declining. The rapid evolution of the absorption spectrum makes this source peculiar among the active galaxies with high velocity outflows. Another detection of the absorption feature also precedes the other flare. The variability of the absorption feature partly accounts for the excess variability in the 8-10 keV band where the absorption feature appears. Although no reverberation measurement is available, the black hole mass of 2e6 Msun is inferred from the X-ray variability. When this mass is assumed, the black hole is accreting at around the Eddington limit, which may fit the highly ionized disc and strong outflows observed in this galaxy.
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